Updated Wednesday at 8:50 a.m. with information with information from the Texas State Securities Board.

AUSTIN — A North Texas senator is defending legislation that would boost the regulatory powers of the state agency her husband leads, while potentially gutting investment rules he is accused of breaking.

Angela Paxton’s Senate Bill 860 would create a new program to let people market certain “innovative financial products or services” to small groups of Texas investors “without obtaining a license, registration or other regulatory authorization.” The attorney general’s consumer protection division would administer the program.

“It directly affects her husband’s authority,” Randall “Buck” Wood, an ethics lawyer who also spoke to the Tribune, told The Dallas Morning News on Tuesday. “I have never seen anybody who has tried to introduce [a bill] like this.”

It’s also inappropriate, Wood alleged, that the legislation may alter securities laws her husband is accused of violating.

Attorney General Paxton was indicted in July 2015 for failing to register as an investment adviser representative, a third-degree felony under current law. “Investment advisers” are included in the scope of the innovation program Sen. Paxton’s bill would create.

Sen. Paxton did not answer requests for comment on her bill. On Tuesday, she told the Associated Press it “has literally nothing to do" with her husband's criminal case and said she didn't consult with him on the bill.

"That may be hard for you to believe," she said. "But that has nothing to do with the purpose of the bill. People in my district brought this bill to me."

Over the weekend, she told the Tribune the legislation would help the growing financial technology, or "fintech," industry.

"SB 860 allows for the growth and economic benefit of the emerging Financial Technology industry while the state provides the necessary regulatory framework and consumer protection in the marketplace," she said. "The state agencies that have regulatory oversight of financial institutions and consumer protection laws will provide appropriate regulatory support within the sandbox to ensure that consumers are protected."

But Texas securities experts were unsure how Paxton's bill would work.

In addition to consumer loans and payment plans, the bill would also change oversight rules for “investment advisers,” the firms and individuals who help Texans figure out where to invest their wealth. It's unclear whether Paxton's alleged crime — failing to register with the State Securities Board as an adviser representative — would still be illegal if this bill becomes law, experts said.

Sen. Paxton did not return requests for clarification on these questions.

In April 2014, her husband was reprimanded and fined $1,000 for failing to register as an investment adviser representative. A Collin County grand jury indicted him for this mistake, which he's called an administrative oversight, the next year.

The securities board oversees about 1,450 investment advisers, staff told The News, and spends about $4.5 million per year of its budget on registering, inspecting and enforcing securities laws. AG Paxton has not been registered since November 2014.

“It looks like they’re saying all this authority is transferred to the attorney general’s office from the Texas State Securities Board,” Dallas attorney John Teakell, who specializes in securities fraud, said Monday. “But within the bill, as it is written, it still says the AG needs to consult with the applicable agency.”

“[The bill] needs to be clarified,” Teakell said. “It leaves open a lot of other questions.”

Jeff Ansley, a former enforcement attorney with the U.S. Securities and Exchange Commission, worried that shifting oversight to the AG’s office may slow the process or even expose consumers to greater risk.

“Regulation like this, it’s better performed by securities professionals," Ansley said, adding the bill was “inartfully” written. “It’s hard for me to picture that this bill would actually become enacted in a statute without” further clarification.

The State Securities Board declined to comment on the bill. Prosecutors pursuing the securities fraud charges against Paxton also turned down a request for comment.